Fears over JJB’s future grow
THE future of troubled JJB Sports as an independent company was today looking increasingly bleak amid reports that one of its debtors has appointed an accountancy firm to advise it on the retailer’s future.
It is understood that Barclays, which has lent the Wigan-based group £60m, has instructed Grant Thornton as fears for Wigan-based JJB grow.
The news comes as the sports chain continues to try to raise cash to reduce its bloated debt pile, which includes a £20m loan from failed Icelandic bank Kaupthing. Advisers from KPMG are working with JJB on its negotiations with lenders.
JJB has already been in dispute with HBOS, another lender to the company, over its banking covenants.
The firm has received an offer for its Qube and Original Shoe Company lifestyle division, believed to be from rival JD Sports Fashion, which last Friday spent £8m acquiring a 10% stake in the group.
It is also reportedly in talks with former chairman and major shareholder David Whelan, who owns Wigan Athletic, over a £100m bid for its 54 health clubs.
Meanwhile, it has sold stores in Cardiff Bay, Salisbury, Worthing and York Davygate to billionaire Mike Ashley’s Sports Direct International for £3.4m. The company said the proceeds from the transaction will be used by JJB to reduce its level of borrowings.
It is believed that sales at JJB have got even worse over last few weeks and some major brands, including Puma, have stopped supplying them amid claims that some credit insurers have refused to provide cover to suppliers.
It has been a torrid time for retailers in recent weeks with Woolworths becoming the most high profile casualty so far of the economic downturn amid warnings over further problems to come.
